AARP Report: Caregiving Costs Surge 60% to $11,508 Annually

Key points

• Average annual out-of-pocket caregiving costs reached $11,508, up 60% from 2021, according to AARP.
• Caregiving expenses consume 31% of average household income, but 76% for households earning below $40,000.
• Housing and household costs average $4,797 annually, while medical expenses average $3,313.
• Caregivers for individuals with dementia spend an average of $15,846 annually, compared to $10,221 for non-dementia cases.
• Nearly two-thirds of working caregivers reported work-related impacts, including reduced hours or quitting jobs entirely.

Background

This report follows earlier coverage highlighting the severe financial toll of dementia care, where monthly costs often exceed $7,000. Previous analyses noted that while macroeconomic indicators like median household income reached records in 2025, consumer sentiment remained negative due to persistent inflation and widening inequality, a trend mirrored in the rising costs of unpaid family labor.

How outlets are covering it

Fox Business emphasized the immediate financial strain, noting that caregivers often borrow money or dip into retirement savings to cover costs. The Honolulu Star-Advertiser highlighted geographic and racial disparities, noting that caregivers in New York and New Jersey spend nearly twice as much as those in the Midwest, and that Black caregivers spend the highest percentage of their income (52%) on care. NPR focused on the 'double whammy' of rising costs and lost income, citing a case study of a caregiver who quit her job, halving her family's income. CBS News underscored the impact on the 'sandwich generation,' noting that caregivers often pull back on their own retirement savings to manage the unexpected costs of home modifications and professional help.

Why it matters

The surge in caregiving costs threatens the economic security of millions of Americans, particularly low-income households and the 'sandwich generation.' As costs outpace inflation and general economic growth, many families are forced to deplete savings or alter career trajectories, highlighting a systemic gap in support for aging populations and the need for policy changes such as tax credits and paid leave.

What to watch

AARP is advocating for policy changes including tax credits, grants, paid leave, and expanded home care options. Congress has introduced bipartisan bills to establish a national $5,000 tax credit for caregivers and to protect Social Security benefits for those who stop working to care for family. However, funding for state Medicaid programs that pay family caregivers is likely to dwindle due to recent federal budget cuts.